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Kenya Law / Blog / Case Summary: Whether an unregistered post-nuptial agreement overrides a registered ante-nuptial agreement

Whether an unregistered post-nuptial agreement overrides a registered ante-nuptial agreement

AM v HM [2020] ZACC 9

CCT 95/19

Constitutional Court of South Africa

Mogoeng CJ, Jafta, Khampepe,Madlanga,Mhlantla, Theron, Tshiqi JJ and Mathopo, Victor AJJ

May 26, 2020

Reported by Faith Wanjiku & Ian Otenyo

Download the Decision

Family law – divorce – matrimonial property–post-nuptial agreements– validity of post-nuptial agreements where they altered terms in pre-nuptial agreements – whether spouses could enter into agreements that determined their proprietary rights in the course of marriage –– Matrimonial Property Act 88 of 1984, section 21 (1)

Jurisdiction – appeal – appeal before the Constitutional Court of South Africa – novel issues before the court – whether the Constitutional Court had jurisdiction to hear matters of novel issues

Brief facts:

The appellant and the respondent got married to each other on August 28, 1993, out of community of property with the exclusion of the accrual system. The appellant later on drafted another agreement in the course of their marriage, which was signed by the respondent on November 10, 2014. The new contract purported to set aside certain terms of the ante-nuptial contract by entitling the applicant to half of the respondent’s estate and for him to pay her maintenance. On November 30, 2014, the respondent demanded for a divorce.

Subsequently, the respondent issued summons for divorce in the Regional Court. The appellant filed a counterclaim seeking, among other things, a declaratory order that the post-nuptial agreement was valid and binding, and that it was signed in settlement of all claims or disputes that might emanate from the divorce action.

The Regional Court dismissed the appellant’s counterclaim on the ground that the post-nuptial agreement was not entered into in contemplation of a divorce and that it would be against the law and public policy to allow parties to opt out of their marital regime without the mechanism as provided for in section 21(1) of the Matrimonial Property Act. Consequently, it granted a decree of divorce.

The appellant applied to the High Court, for leave to appeal. The High Court upheld the appeal and overturned the decision of the Regional Court. It held that the agreement was enforceable since it had been concluded in contemplation of a divorce with its purpose being to constitute a settlement agreement. The respondent appealed to the Supreme Court of Appeal contesting the High Court’s decision. The Supreme Court of Appeal noted that since the parties had not approached a court in terms of section 21(1) of the Matrimonial Property Act to sanction the change, the central issue was whether the agreement was made in contemplation of a divorce. It held that the applicant failed to prove that the agreement was concluded in contemplation of a divorce. Therefore, the Supreme Court Appeal upheld the appeal and set aside the order of the High Court. Aggrieved by the decision, the appellant approached the Constitutional Court for leave to appeal.

Issues:

  1. Whether spouses could enter into agreements that determined their proprietary rights in the course of marriage.
  2. Whether the Constitutional Court had jurisdiction to grant leave to appeal where novel issues were introduced before the court.

Relevant provisions of the law

Matrimonial Property Act 88 of 1984

Section 21 (1)

A husband and wife, whether married before or after the commencement of this Act, may jointly apply to a court for leave to change the matrimonial property system, including the marital power, which applies to their marriage, and the court may, if satisfied that––

(a)there are sound reasons for the proposed change;

(b)sufficient notice of the proposed change has been given to all the creditors of the spouses; and

(c)no other person will be prejudiced by the proposed change, order that such matrimonial property system shall no longer apply to their marriage and authorize them to enter into a notarial contract by which their future matrimonial property system is regulated on such conditions as the court may think fit.”

Held:

  1. It was not in the interest of justice to grant leave to appeal because the applicant introduced novel issues before the court. She raised constitutional issues in terms of contractual freedom, dignity and unfair discrimination and also sought a constitutional compliant interpretation of section 21(1) of the Matrimonial Property Act. Those issues were not ventilated in the other courts and as such, it rendered the Constitutional Court a court of first and last instance.
  2. The Supreme Court of Appeal did not affect the parties’ capacity to contract in respect of subsequent nuptial agreements. The post-nuptial agreement could only be recognized by the court only if divorce was contemplated by the parties at the time the agreement was signed. As such, the post-nuptial agreement did not override the pre-nuptial agreement.

Appeal dismissed

Orders

  1. The application for leave to appeal was dismissed.
  2. Each party to pay their own costs.

Relevance to the Kenyan situation The Matrimonial Property Act No. 49 of 2013 Laws of Kenya provides for pre-nuptial agreements. Section 6 (3) of the Act states that: -

“despite subsection (1), the parties to an intended marriage may enter into an agreement before their marriage to determine their property rights.”

While Kenyan laws recognize pre-nuptial agreements, they are silent on post-nuptial agreements. However, Kenyan courts have addressed the place of post-nuptial agreements in the subsistence of a marriage.

In the case of C Y C v K S Y [2014] eKLR, the High Court held, inter alia, that it confirmed the post-nuptial agreement executed by the parties.

In OKN v MPN [2017] eKLR, the Court of Appeal stated that under section 17 (1) of the Matrimonial Act, the court has the power to decide on distribution of property upon annulment of a marriage; that upon pronouncing a decree for divorce or nullity, the court could inquire into the existence of ante-nuptial or post-nuptial agreements made by parties.

The instant case adds jurisprudential value to matrimonial cases where parties contest the validity of post-nuptial agreements in the existence of pre-nuptial agreements. The South African Constitutional Court acknowledged that spouses are free to enter into contracts that negate terms of pre-nuptial agreements. It further stated that for such post-nuptial agreements to be valid, a party has to prove that a divorce was a considered factor when entering into the agreement.

 

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